Ballmer talks up the cloud in European tour

Microsoft CEO Steve Ballmer went to Europe this week to help sell the Internet cloud, a key Microsoft business area.

As part of his talks, Ballmer announced in his Stockholm, Sweden talk on Monday that Microsoft plans to release a beta of its cloud-based Dynamics CRM service next week. He also said that a market release of Windows Intune, currently at beta 2 release, will be announced next week in Europe. Likely Ballmer means another test release of Intune, as Microsoft said last month that Windows Intune would "be generally available in 2011."

So far on his European tour, which also touched down in London on Tuesday, Ballmer has delivered a not-too-modified version of his all-in-the-cloud speech. Ballmer signaled Microsoft's formal move to the cloud in March, where he kicked off this "all-in" speech at the University of Washington.

In that speech, Ballmer noted Microsoft's business shift toward providing Web services to support the IT operations of organizations, which is being carried out through Microsoft's worldwide datacenter buildouts. Microsoft offers software as a service via its Business Productivity Online Suite of services (using hosted versions of Exchange/SharePoint) or through Microsoft's Windows Azure cloud computing platform.

Microsoft has invested $500 million in completing its Dublin datacenter, which will serve Western Europe, Ballmer noted. The cloud carries implicit security and privacy issues that need to be addressed, Ballmer said. He didn't mention Europe's consideration of laws concerning where corporate data is located, which could also prove to be an issue with cloud computing.

Cloud services can offer some cost and scalability benefits to organizations. Migration to the cloud also might mean that some IT support personnel could lose their jobs. However, Microsoft officials tend to suggest that such personnel will instead be freed to address business goals in innovative ways with the adoption of cloud computing.

Orientation toward the cloud will require changes in servers and clients, both in terms of software and hardware, Ballmer said, according to a Microsoft transcript. He also emphasized that the cloud is "about integrating the smart client with standards from the cloud."

In that regard, Ballmer sees a role for Windows, as well as the newly released Internet Explorer 9 beta. He explained that "the cloud wants devices like Windows to know about it, to love it, and to treat cloud applications and client applications similarly and both as first class citizens. And I think by building an Internet Explorer 9 experience that loves the cloud and loves the Windows PC you start to see the direction in which we're taking that."

In his Stockholm speech, Ballmer cited general success so far for Microsoft's cloud efforts. He said that 50 percent of U.S. Fortune 500 customers now use a Microsoft cloud service, mostly through Microsoft's business productivity services. He also claimed that the Windows Azure and SQL Azure platforms support more than 10,000 paying customers.

Microsoft announced on Monday that it struck a three-year contract deal with Volvo in Sweden to provide hosted collaboration and communications services. It also noted other new online services customer wins just this week.

Ballmer is scheduled to hit Cologne, Germany on Wednesday. He's off to Paris on Thursday. Finally, he concludes the tour by landing in Madrid, Spain on Friday.